Archives for April 2014

Encore Capital Group Earns Certified Debt Buyer Designation from DBA International

April 10, 2014 By admin Leave a Comment

Encore Capital Group, Inc. (NASDAQ: ECPG), an international specialty finance company, announced that it has earned the designation of Certified Professional Receivables Company (CPRC) after completing the prescribed requirements of DBA International’s rigorous Debt Buyer Certification Program. Additionally, DBA International has elected Encore’s Senior Vice President of Business Development Amy Anuk as chair of its Certification Council.

DBA’s Debt Buyer Certification Program consists of a company-based designation and an individual-based designation for those who meet prescribed continuing education and background criteria. Company certifications are granted to organizations that comply with 20 uniform standards based on industry best practices. These standards address account documentation, chain of title, consumer complaint and dispute resolution, statute of limitation compliance, vendor management, credit bureau reporting, resale, and other relevant operational procedures. Compliance with the standards will be monitored through independent third-party audits as well as through a structured self-compliance audit process.

“DBA certification is the gold standard for our industry,” said Anuk. “It not only strengthens Encore’s global leadership position, but it also recognizes our longstanding commitment to operating ethically and treating consumers with respect.”

As chair of the 11-member Certification Council, Anuk will be responsible for the administration of DBA’s Debt Buyer Certification Program. She previously served on the inaugural task force responsible for the creation and launch of the Debt Buyer Certification Program and as chair of the Standards Committee on the Certification Council. Anuk brings over 12 years of experience in the financial services industry to her role. At Encore, she oversees the acquisition of consumer debt portfolios and manages the company’s partnerships with major financial institutions. Under her direction, Encore has invested over $2.6 billion in portfolio purchases.

DBA President Bryan Faliero congratulated Encore, saying, “By becoming a Certified Debt Buyer, Encore has demonstrated that it is committed to operating with the highest ethical standards, and will abide by the program’s standards of excellence.”

For more information about DBA’s Debt Buyer Certification Program, or to download an application, please visit DBA’s website at www.dbainternational.org/certification/certification.asp.

Encore Capital Group, an international specialty finance company with operations spanning seven countries, provides debt recovery solutions for consumers and property owners across a broad range of assets. Through its subsidiaries, the Company purchases portfolios of consumer receivables from major banks, credit unions, and utility providers, and partners with individuals as they repay their obligations and work toward financial recovery. Through its Propel Financial Services subsidiary, the Company assists property owners who are delinquent on their property taxes by structuring affordable monthly payment plans and purchases delinquent tax liens directly from select taxing authorities. Through its subsidiaries in the United Kingdom, Cabot Credit Management and Marlin Financial Services, the Company is a market-leading acquirer and manager of consumer debt in the United Kingdom and Ireland. Through its Refinancia subsidiary, the Company services distressed consumer debt in Colombia and Peru. Encore’s success and future growth are driven by its sophisticated and widespread use of analytics, its broad investments in data and behavioral science, the significant cost advantages provided by its highly efficient operating model and proven investment strategy, and the Company’s demonstrated commitment to conducting business ethically and in ways that support its consumers’ financial recovery. More information about the Company can be found at www.encorecapital.com. More information about the Company’s Cabot Credit Management subsidiary can be found at www.cabotcm.com.

DBA International is the nonprofit trade association that represents the interests of companies that purchase performing and nonperforming receivables on the secondary market. DBA provides its members with networking, educational, and legislative advocacy opportunities through an annual conference, an executive summit, regional seminars, state and regional committees, newsletters, webinars, teleconferences, and other media. DBA promotes uniform industry standards of best practices through the Debt Buyer Certification Program and a code of conduct. Adherence to both are required for DBA membership. DBA is headquartered in Sacramento, California.

Encore Capital Group Earns Certified Debt Buyer Designation from DBA International
http://www.insidearm.com/daily/debt-buying-topics/debt-buying/encore-capital-group-earns-certified-debt-buyer-designation-from-dba-international/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

State AG Files Five Lawsuits Against Payday Lenders

April 10, 2014 By admin Leave a Comment

Illinois Attorney General Lisa Madigan today filed five lawsuits in a sweep cracking down on unlicensed, online payday lenders and a loan lead generator promoted by talk show host Montel Williams for illegally offering expensive, predatory loans that trap Illinois borrowers in excessive, cyclical debt loads.

Madigan filed lawsuits this week in Cook County Circuit Court on behalf of the Illinois Department of Financial and Professional Regulation (IDFPR) against four out-of-state payday lenders that are operating exclusively online, selling payday loans racked with fees that are double the amount allowed under state law. The lawsuits allege BD PDL Services LLC, Mountain Top Services I LLC, Red Leaf Ventures LLC and VIP PDL Services LLC charged Illinois borrowers $30 for every $100 loaned and allowed borrowers to take out multiple loans at once.

The Payday Loan Reform Act limits the fees a payday lender can charge a consumer to no more than $15.50 per $100 loaned. Payday lenders cannot issue a loan to a consumer if the loan would result in their being in debt to one or more payday lender for more than 45 consecutive days, and they cannot issue a loan to a consumer who already carries balances on two loans. Lenders must also wait seven days before issuing a loan to a repeat customer, once their loans are paid off.

“These online, unlicensed predatory lenders are putting Illinois consumers into unregulated, unprotected payday loans,” Madigan said. “None of these payday lenders is complying with the consumer protection we fought for over a decade to put into place to keep borrowers from being trapped in loans with excessive interest rates and fees.”

Madigan filed a fifth lawsuit against online broker MoneyMutual LLC for its role generating customer leads on payday loans with unlicensed lenders in violation of state law. The Attorney General’s lawsuit alleges the company was able to attract borrowers to its website in large part due to the profile of its celebrity spokesman Montel Williams.

Madigan also expressed concerns about the company’s data collection practices in light of the recent wave of major data security breaches. MoneyMutual requires potential borrowers to share their personal banking information, Social Security number, date of birth, driver’s license information, private address and employment records, all of which can be shared with third parties, putting borrowers at significant risk of identity theft.

Madigan’s lawsuits follow several cease and desist orders issued to the lenders and Money Mutual by IDFPR.

“Out-of-state lenders who ignore Illinois laws to take advantage of vulnerable consumers deserve to face the full weight of our laws,” said Manuel Flores, Acting Secretary of Financial and Professional Regulation. “It is gratifying that the Attorney General is backing up our cease and desist orders with demands for full restitution for the unwary borrowers.”

Madigan’s lawsuits ask the court to permanently ban the defendants from the payday loan business in Illinois, cancel pending payday loan contracts with Illinois consumers and require full restitution. The lawsuits also seek to impose on the defendants an array of civil penalties for violations of the Payday Loan Reform Act of 2005 and the Illinois Consumer Fraud and Deceptive Business Practice Act.

State AG Files Five Lawsuits Against Payday Lenders
http://www.insidearm.com/daily/collection-laws-regulations/collection-laws-and-regulations/state-ag-files-five-lawsuits-against-payday-lenders/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

InterSystems Honors Ontario Systems for Easing Regulatory Compliance in Collection Industry

April 3, 2014 By admin Leave a Comment

Ontario Systems, a leading receivables management technology and services provider, is easing the regulatory burden for its customers in the third-party collection industry. Utilizing advanced software technologies from InterSystems, Ontario Systems developers rapidly designed and built a cloud-based Complaint Tracker application and delivered it to early users – in less than six weeks. Because of the solution’s potential to raise the competitive bar in the collection industry, InterSystems is honoring Ontario Systems with a Breakthrough Application Award, which recognizes innovation in application development among InterSystems software partners.

“The Consumer Financial Protection Bureau (CFPB) sent shock waves through our customer base with the announcement last year that third-party collection agencies were under CFPB jurisdiction,” said Chris Cochran, Product Director, Ontario Systems. Per the CFPB, third-party collectors are now responsible for monitoring consumer complaints, putting in place a formal process to take appropriate action, and responding to the consumer that the complaint has been resolved. Collection agencies are required to capture the complaint, regardless of how it comes in, investigate within the organization to identify any possible process breakdown, perform a root cause analysis of breakdown cause, and respond to the consumer within a reasonable time, Cochran explained.

Recognizing the new compliance burden placed on collection agencies, a major segment of Ontario Systems’ customer base, Rozanne Andersen, Chief Compliance Officer of Ontario Systems and an industry thought leader in the area of compliance, researched the new CFPB rules. Building on that insight, the company created Complaint Tracker in record time.

“We’ve been InterSystems partners for 30 years and have complete confidence in their technology platform,” Cochran said. “Building on InterSystems technologies, we went from initial concept to delivering a functional product in just 35 days.”

Complaint Tracker is built on the InterSystems Ensemble® platform for rapid development of connected applications, as well as the InterSystems Caché® high-performance database and InterSystems DeepSee®, powerful analytics technology that can be embedded in transactional systems.

Innovative Cloud Strategy Enables Fast Response, Market Expansion

In contrast with its history of delivering enterprise-scale applications deployed within the customer’s environment, Ontario Systems opted to fast-track Complaint Tracker in the cloud. “We built a prototype that was reviewed by 25 customers, applied changes, performed the production build, and deployed it in our cloud data center. The application is immediately available to any customer on a subscription basis,” according to Cochran.

“InterSystems’ technology allows us to rapidly build and deploy secure, scalable applications in record time. Their technology enables us to quickly deliver innovations like real-time analytics with minimal additional investment. InterSystems technology and our partnership is a foundational part of our platform that we leverage to serve the needs of a growing and varied marketplace,” said Ken Couch, Chief Enterprise Architect, Ontario Systems.

Early Complaint Tracker adopters began running the application in the third quarter of 2013, and the user base now includes 30 customers with expectations that the base will double by mid-2014. One-third of the users are new to Ontario Systems, a strong indicator that the cloud-based application is opening doors for market expansion. Seven of the new customers are running collection systems from other providers, and the remaining three firms operate completely outside of the collection industry vertical while still being subject to CFPB compliance.

Complaint Tracker is the first product resulting from the company’s breakthrough software as a service (SaaS) strategy focused on cloud-based offerings, according to Cochran. Plans are to launch a portal in June 2014, which will host any new product built on the cloud subscription model. “We feel this is our best approach for ongoing innovation,” Cochran added.

Benefits of running in the cloud are readily apparent to Complaint Tracker customers. First, the application is conveniently available in any location and environment. In addition, Ontario Systems is able to provide customers with competitive benchmarks, which is critical to success in the challenging third-party collections market.

“Through Complaint Tracker reporting, each customer can easily determine where it stands in relation to its competitors,” Cochran explained. “Since this is a multitenant environment, we are able to gather outcomes data, de-identify it by stripping out consumer and company information, and then deliver feedback to our customers.”

For example, Cochran continued, “Suppose 40 percent of an agency’s consumer complaints are streaming in from the CFPB web site, and its competitors are receiving an average of just 18 percent from the same source. Immediately, questions are raised about why the agency is so far out of alignment with industry peers. Are there problems with the agency’s website? Is more information needed on emails or on the site itself? Complaint Tracker, which includes virtually real-time information dashboards based on InterSystems DeepSee, makes it possible to ask the right questions and stay competitive in a very tough market.”

“Our partnership with InterSystems has enabled us to deliver breakthrough solutions to our clients, and Complaint Tracker is only the latest example,” said Michael Wolfe, Vice President and Chief Technology Officer for Ontario Systems. “We are pleased to receive this recognition from InterSystems on behalf of our clients.”

“Ontario Systems is recognized for its ability to serve its receivables management clients with a focus on innovation, strategy, legal compliance, and efficiency,” said Paul Grabscheid, InterSystems Vice President of Strategic Planning. “Ontario Systems’ innovative use of InterSystems technology with cloud deployment enables new customer requirements to be addressed in weeks, rather than the multi-year timeframes associated with traditional software development and implementation cycles. The result is a real competitive advantage for Ontario Systems and its customers.”

InterSystems is a global software leader with headquarters in Cambridge, Massachusetts, and offices in 25 countries. InterSystems provides advanced technologies for breakthrough applications. InterSystems Caché® is an extremely fast and massively scalable database system. InterSystems Ensemble® is a platform for rapid integration and the development of connectable applications. InterSystems DeepSee® and InterSystems iKnowTM are technologies for conducting real-time active analytics with structured and unstructured data. For more information, visit InterSystems.com.

Ontario Systems, LLC is a leading provider of accounts receivable and strategic receivables management solutions for the collections and healthcare industries. Offering a full portfolio of software, services, and business process expertise, Ontario Systems customers include nine of the 10 largest collections agencies, and three of the five biggest health systems in the U.S., with 55,000 representatives in more than 500 locations.

To learn more about how Ontario Systems can help power up your receivables, visit OntarioSystems.com, or email info@ontariosystems.com.

InterSystems Honors Ontario Systems for Easing Regulatory Compliance in Collection Industry
http://www.insidearm.com/daily/debt-collection-news/debt-collection/intersystems-honors-ontario-systems-for-easing-regulatory-compliance-in-collection-industry/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

CFPB Attorney Makes Explosive Allegations at House Hearing on Agency Culture

April 3, 2014 By admin Leave a Comment

An attorney at the Consumer Financial Protection Bureau (CFPB) Wednesday accused the Bureau of fostering a “culture of retaliation and intimidation that silences employees and chills the workforce from exposing wrongdoing” in a hearing before a House Financial Services Subcommittee.

The hearing was called by Republicans in response to growing reports that the CFPB has issues with internal staffing and worker morale, especially concerning employee reviews. But after the CFPB declined to send representatives to testify, the hearing was focused on one employee and her ongoing dispute with the Bureau.

Angela Martin, an attorney in the agency’s enforcement division, has been embroiled in a battle with the CPFB since filing a complaint of discrimination and retaliation in December 2012. At the time, she was chief counsel in the CFPB’s Consumer Response unit, the group responsible for consumer complaints against financial firms.

Martin’s opening statement was focused on her experience with her personnel dispute with the Bureau. Not revealing what led to the initial complaint, she alleged that she has suffered severe retaliation due to it.

Martin alleged that while a complaint she brought through the Equal Employment Opportunity process was being dealt with, she received a phone call from CFPB Director Richard Cordray in August asking that she have her lawyers “back down” because he was trying to secure her a job in the bureau’s enforcement division. Martin contends she agreed to settle this complaint but then did not receive the job discussed because it had been given to somebody else. But she is currently identified as an attorney in the enforcement division, the job she was seeking.

Martin claimed that women and minorities suffered from the actions of a group of white managers, leading to a hostile work environment. Within the Consumer Response unit, Martin said there was an exodus of women and African-Americans who were replaced by white males. She claimed that the replacements were “cronies” of Scott Pluta, the assistant director of Consumer Response and Martin’s boss.

“It is regrettable that the details of a personnel issue so unrepresentative of conditions at the CFPB have been aired so publicly,” Pluta said in a statement. “Due to Ms. Martin’s privacy rights in an ongoing investigation, I am ethically and legally unable to make public the documents that would vindicate my actions. And despite the fact that my privacy rights and those of my staff have been so grossly trampled upon, I remain confident in the process and the Bureau.”

Martin testified that CFPB managers had hired only African-Americans to work at the consumer complaint intake unit within Consumer Response. She said that because only blacks worked at the unit, CFPB workers nicknamed it “the Plantation.”

“African-Americans tell me it is extremely hard to leave the Plantation,” Martin said. “You must be extremely savvy or you must be having somebody else to get you out.”

Democrats on the Subcommittee tried to persuade the Republican leadership to cancel the hearing once it was determined that it would focus solely on Martin, her individual claims, and hearsay from other employees. Democrats claimed that the focus and tone of the hearing had decidedly shifted and had taken on “more political motivation, to further disparage the CFPB.”

But Rep. Maxine Waters (D-Calif), the ranking Democrat in the subcommittee and a signatory to the letter, appeared moved by Martin’s story. She did not ask any questions, saying, “I’d like to yield back the balance of my time to Ms. Martin so she can just continue talking to us.”

CFPB Attorney Makes Explosive Allegations at House Hearing on Agency Culture
http://www.insidearm.com/daily/collection-laws-regulations/collection-laws-and-regulations/cfpb-attorney-makes-explosive-allegations-at-house-hearing-on-agency-culture/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

Panel of CFPB, OCC, and FTC Regulators Addresses Banker Questions

April 3, 2014 By admin Leave a Comment

On Tuesday, Senior Vice President at Wells Fargo Bank Larry Tewell moderated a discussion titled “Implications for Default Management” among a panel of regulators at the Consumer Bankers Association national conference, CBA Live. The panel included:

Daniel Dwyer, Attorney in the Division of Financial Practices at the Federal Trade Commission (FTC)
Grovetta Gardineer, Deputy Comptroller for Compliance Policy in the Office of the Comptroller of the Currency (OCC)
Tom Pahl, Managing Counsel in the Office of Regulations at the Consumer Financial Protection Bureau (CFPB)

The OCC’s November 2013 guidance for managing risks associated with third-party relationships was an early focus of the conversation. Gardineer explained that, while not official policy, this was really a “re-fresh” of existing guidance and came as a result of their surprise over the fact that management of third-parties hadn’t yet become something that institutions thought (or at least demonstrated) was important to do. She reminded the audience that the OCC wants to see attention to the whole cycle of a relationship, and not just a one-time box check exercise at the time of contract.

Related to the prevalence of complaints lodged about debt collection attempts made to the wrong person or about the wrong amount, Tewell asked the panel to shed light on the disconnect between industry data, which tells CBA members that 98% of their data is right… yet “the next day” in the hands of a third-party it becomes wrong.

Tom Pahl responded that they are learning how problems arise up and down the chain. He noted there are many potential causes over time, and they are seeking to understand which might be appropriate to address with regulation. One thing they are looking at is whether there should be standard documents required for sale, and how/whether those need to vary based on debt type.

Dan Dwyer – a primary author of the FTC’s 2013 study on debt buying – said their research found that many buyers didn’t receive dispute data or a breakdown of the balance by original amount, interest, and fees. He raised the concept of “prior substantiation” that the claims you are making are accurate.

Moving on, Tewell asked Pahl to describe the process for vetting the thousands of comments received by the CFPB in response to its ANPR on debt collection. His overview:

The team is in the process of reviewing and summarizing the comments
Follow up with various commenters, academics, and others to fill in gaps and see how discrepancies might be resolved
Conduct a large scale consumer survey in an attempt to infuse data (versus solely anecdotal/experiential input) into the process
Also considering disclosure testing
With the above inputs, we will outline where we are going
Conduct a SBREFA panel (here is an example) to evaluate potential effects on small business
Put out a report on what we’ve found through the SBREFA panel and what we will do about it
Put out a Notice of Proposed Rulemaking (NPR), with the text of proposed rules, for comment

While Pahl couldn’t specify an exact timeline, it was clear to all in the room that this would not be a swift process.

Worthy of note: Regarding disclosure testing, Mr. Pahl didn’t elaborate on a proposed process, but Tewell informally asked the audience for a show of hands for who will be volunteering to participate. Not a hand in the crowd was raised. While this of course was not an official request or response, it underscores the challenge of true live testing in a litigious environment. A similar response has been provided by many collection agencies who would like to participate, but feel at the end of the day that the risk of lawsuits over technical FDCPA violations is too great.

The panel also addressed the topic of communicating with consumers through newer technology than allowed by current law. Dwyer commented that he does believe consumers should be able to communicate [with collectors] in new and preferred ways, with the caveats that collectors can’t deceive, they must give proper disclosure, they can’t disclose to third-parties, and consumers can’t be charged for the communication.

Tom Pahl agreed, but added that collectors need to be able to communicate in order to resolve debts, and no methods are inherently off the table. He said we need to look at each communication, in each context, identify what kinds of risks there are, and how to address those risks.

Panel of CFPB, OCC, and FTC Regulators Addresses Banker Questions
http://www.insidearm.com/daily/collection-laws-regulations/collection-laws-and-regulations/panel-of-cfpb-occ-and-ftc-regulators-addresses-banker-questions/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News